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Patisserie Valerie faces legal action Patisserie Valerie faces legal action
(35 minutes later)
The company that owns Patisserie Valerie could be facing legal action from investors over the collapse of the cafe chain.The company that owns Patisserie Valerie could be facing legal action from investors over the collapse of the cafe chain.
Chris Boxall, co-founder of Fundamental Asset Management, said he was "flabbergasted" by the situation.Chris Boxall, co-founder of Fundamental Asset Management, said he was "flabbergasted" by the situation.
He told BBC Radio 4's Today Programme he was considering legal action as he had a "moral duty" to his clients.He told BBC Radio 4's Today Programme he was considering legal action as he had a "moral duty" to his clients.
Administrators KPMG are closing 70 stores, and are looking for buyers for the 121 cafes that remain open.Administrators KPMG are closing 70 stores, and are looking for buyers for the 121 cafes that remain open.
Entrepreneur Luke Johnson, who bought the business in 2006, has committed more money to ensure staff are paid this month.Entrepreneur Luke Johnson, who bought the business in 2006, has committed more money to ensure staff are paid this month.
The first signs of trouble came in October after accounting "irregularities" were announced. That included "secret overdrafts" unknown to Mr Johnson and the board.The first signs of trouble came in October after accounting "irregularities" were announced. That included "secret overdrafts" unknown to Mr Johnson and the board.
Nevertheless, Mr Boxall said he was "staggered" and had questions about Mr Johnson's oversight of the business.Nevertheless, Mr Boxall said he was "staggered" and had questions about Mr Johnson's oversight of the business.
"What has he and the board been doing? What questions were they asking at meetings, what things were they looking at, did they ever roll up their sleeves and have look at the heart of the business which you would expect from a so-called executive director which he was in this business," he said."What has he and the board been doing? What questions were they asking at meetings, what things were they looking at, did they ever roll up their sleeves and have look at the heart of the business which you would expect from a so-called executive director which he was in this business," he said.
It is not clear if the target of any action might be the company or its former directors, including Mr Johnson.It is not clear if the target of any action might be the company or its former directors, including Mr Johnson.
Employee reaction: 'I couldn't sleep last night'
A member of staff, who did not want to be identified, told the BBC that Patisserie Valerie's collapse had come as a complete shock to them.
"Apparently everything at work was fine since October.
"I was always asking the managers, 'are you going to close the shop?' and they said no, no, no," said the employee.
"I'm still in shock - I couldn't sleep last night."
Employees of stores that are closing were informed by phone on Tuesday evening, and asked to attend meetings on Wednesday where they will receive further information.
"Everyone was thinking that everything was fine," the employee added.
"Last Wednesday, they had a meeting with all the big managers and they were making plans to make the shops better. Everyone was quite positive last week."
Shares in Patisserie Holdings were suspended in October following the announcement of accounting irregularities and finance director Chris Marsh was arrested and later released on bail without charge.Shares in Patisserie Holdings were suspended in October following the announcement of accounting irregularities and finance director Chris Marsh was arrested and later released on bail without charge.
Mr Johnson, who owned 37% of the business, kept it going with a loan and money was raised from other shareholders.Mr Johnson, who owned 37% of the business, kept it going with a loan and money was raised from other shareholders.
But earlier this month the company said the accounting scandal was worse than it thought.But earlier this month the company said the accounting scandal was worse than it thought.
"This business has gone from half a billion [pounds] valuation to nothing in a matter of months," Mr Boxall said."This business has gone from half a billion [pounds] valuation to nothing in a matter of months," Mr Boxall said.
'Good brand''Good brand'
While he had questions for the former directors, he also said there were questions for the banks and the auditors.While he had questions for the former directors, he also said there were questions for the banks and the auditors.
"We're very very angry," he said."We're very very angry," he said.
It is not yet clear which of the 70 stores are closing while up to 900 of the 3,000 staff may lose their jobs.It is not yet clear which of the 70 stores are closing while up to 900 of the 3,000 staff may lose their jobs.
There are hopes the stores which continue trading might find a buyer.There are hopes the stores which continue trading might find a buyer.
Julie Palmer, regional managing partner at Begbies Traynor, is optimistic. She told BBC Radio 5's Wake Up To Money: "It is a good brand, it has got good High Street presence, it was making good profits over a long period of time.Julie Palmer, regional managing partner at Begbies Traynor, is optimistic. She told BBC Radio 5's Wake Up To Money: "It is a good brand, it has got good High Street presence, it was making good profits over a long period of time.
However, she said potential buyers would be sceptical about the company's figures.However, she said potential buyers would be sceptical about the company's figures.
In addition to Patisserie Valerie, the company's other brands include Druckers Vienna Patisserie, Philpotts, Baker & Spice and Flour Power City.In addition to Patisserie Valerie, the company's other brands include Druckers Vienna Patisserie, Philpotts, Baker & Spice and Flour Power City.
Do you work for Patisserie Valerie? Have you been told that your job at risk as a result of your store being closed? Email haveyoursay@bbc.co.uk.Do you work for Patisserie Valerie? Have you been told that your job at risk as a result of your store being closed? Email haveyoursay@bbc.co.uk.
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